What to upgrade first?

No doubt, listening for yourself to as much as possible is great advice. Since you asked, though, I'd do this - I'd find a Linn Majik integrated amp. $500 should fit perfectly. It's a great little integrated amp by a top manufacturer, they're relatively easy to find, and it has a very musical sound to it. There are two versions - one with a phono input, one without. I'm quoting the one without. There are other choices in this price range that would be fine choices (many have been suggested), but IMO it fits your price range perfectly and is a top performer. Then, being broke again with no money burning a hole in your pocket, during the time you're saving for speakers, I would go listen to as many things as possible, savor the investigation, read about speakers, etc., such that when you do have the money, you know what to buy. And, I would allow for some flexibility in the price range you're saving for - ie, if you convince yourself that you'll need to spend $800 or $1000 to get what you really want, you'll already be in the mode that it's a ways off and less tempted to buy something just because it meets your price criteria.

I can't help but agree with the above posts, but, if you'd rather not wait you can still pick up decent gear that meets your budget. Since you're limited to what you can pick up right away, I'd suggest picking up good speaker stands ($100) and a pair of used B&W DM302 speakers ($200). Scour the used sites and pick up a NAD receiver, perhaps a 7250PE ($200). The B&W's are impressive for the price and size, and you won't lose any money when you decide to upgrade later on to something more substantial. Same goes for the NAD, easy to sell here or on EBay. You'll be pretty happy with this set up as you learn to live on Kraft Dinner and peanut butter, as you save up your hard-earned dough for real good tube gear and planar speakers. ATB, Jeff

If you go with speakers first, do not choose them because they sound good connected to your current receiver. Once you upgrade the amp, you may be disapointed with how the speakers sound. A better pair of speakers will be more detailed and revealing, and may sound bright and thin connected to poor electronics. So if you want to do speakers first, have a rough idea what kind of amp you want to get later, and use it at the dealer to audition speakers. Vice Vera for a new amp connected to your old speakers. A better amp will make your old speakers sound better, so that may be a better starting point, but still audition the amp on some other better speakers at the dealer.

For around $500 to $600, the B&W DM602 S2 are a good choice. An NAD integrated amp is a good choice in the $400 to $500 range.

All of the advice and makes/models recommended here are excellent. I would especially heed Sugarbrie in terms of listening to either speaker or amp w/future upgrade potential if you buy from traditional storefront. OTOH, Jeff's advice about buying good name used gear here or ebay and then being able to re-sell is a sound approach and doesn't require delayed gratification.